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Hitting the ‘Mark’ in Laundry/Linen (Conclusion)

A look at laundry production benchmarking

CHICAGO — In laundry and linen services, benchmarking, the process of checking against a standard, helps in the effective usage and processing of textiles.

But what standards should be used for such measurements, and how can improvements be made?

Two experts discussed these topics during the webinar Benchmarking Basics, presented by the Association for Linen Management (ALM).

In this post, Michael Dodge, a production consultant for Gotli Labs (GLOBE), a company based in Switzerland with an objective to create a new system that can manage all resources in a laundry, shares about benchmarking in laundry production.

LAUNDRY PRODUCTION

“What we kind of say is that data is the new gold,” he says. “We have to kind of go into the vault a little bit and pull the data that we need. We have to get the numbers we need to do our benchmarking.”

Dodge says there are many resources as far as production data. 

“We can go ahead and pull data from our laundries, our washroom, our soil area, our finishing equipment,” he points out. “There are a lot of areas where we can pull data into a report that we can look at and benchmark ourselves.” 

There are four main areas in a laundry for managers to benchmark, according to Dodge: soil, washroom, finishing and pack out.

“Be aware of where you were in the past and what you need to do to improve,” he shares. “You have to know what the limitations are of your system; there’s always a limiting factor in a laundry. When we need to push product through, how can we do that?” 

Dodge says the first elements normally examined in a plant are direct production hours and the dollars related to that, including overtime. Also, look at supervisors and their labor hours. Then look at standard performance, whether those are indicated by pieces per hour going through a piece of equipment or pounds per operator hour (PPOH) going through the entire system. 

“I normally see some type of spreadsheet out there that most laundries use, broken down by department, showing number of hours along with what the cost is and other factors,” he says. “Cost of hours and overtime, and pounds being processed.”

Dodge stresses that a laundry should compare itself to itself when it comes to improvement, and not against other plants. This is because there are numerous variables that impact laundry operations. 

“There are different factors that make them get their PPOH,” he shares. “One is automation. What type of automation levels do you have as far as your equipment? Your textile mix, that’s a huge one. COG or rental? Materials handling is the biggest one I’m seeing for industrial, hospitality, healthcare. Look at the input measurement. Sometimes it’s not an apples-to-apples comparison.”

Another type of comparison Dodge sees laundries making, that they shouldn’t, is price per pound. There are even more variables when it comes to price, because the revenues might be different. Costs can be different by area of the country, labor costs and the type of customers the laundry has.

Finally, laundries might be comparing quality, when the question really is, “What do our customers expect going back to them?” 

So, what benchmarks can a laundry get started with? First, Dodge looks at production processing costs. 

“You could look at a lot of factors, like therms per pound or kilowatts per pound or gallons per pound, but here I just want to get some type of range for you to be thinking of, just benchmarking,” he says. “Between 2 and 5 cents per pound for gas and electric, but know where you’re at. Five might not be bad for your location. Water and sewer, between 1 and 2 cents per pound, and chemicals between .5 to 1.5 cents.”

Dodge then says to increase PPOH, there are three things a production manager should be doing, and being aware of, in the laundry. First, does the laundry have product for all of its equipment and different areas and work stations? No station should ever be idle, he says. Second, make sure the equipment is working properly, and third, make sure operators are doing what is expected at each of the positions. 

“These three things, if you make them work, your PPOH is going to be where it should be,” he says.

In terms of PPOH achieved in laundries, Dodge says he has heard of a range from 100 PPOH to plants being designed to push 225 PPOH.

“However, you have to be aware of factors mentioned earlier,” he cautions. “Just because you’re at 100 PPOH doesn’t mean you’re bad. That may be the highest you can get with the plant as it is right now. Realize where you’re at and what you can do. 

“Still, you can almost always improve 10 to 15% by paying attention to the operations in your plant.” 

Dodge says the key to really understanding what’s going on in a laundry system is to have accurate standards. 

“I am a firm believer that the foundation of production is having standards for all your different areas: soil, washroom, finishing, pack out,” he stresses. 

However, production standards have to be fair to the operator and the supervisor, Dodge points out. 

“A trained and skilled operator over the period of eight hours, with a fair and reasonable effort, should be able to get 100%,” he says. “That’s just average. You’re going to have people who can do over 100%. The reason for these numbers is not to say he or she isn’t doing the job the way they should, but to understand why. That’s the important part.”

Every standard should have some documentation, a written description of the job so the operator knows what’s expected, according to Dodge. On top of the documentation, he says there should be some type of time element that shows how the standard was arrived at—know what a plant can do, and each department.  

“You have to have the number and be confident in the number—don’t just have numbers out there,” he says. “The best thing you can do is have constant feedback with the operators, coach them, show them what they need to do, let them know how they’re doing. What you’re trying to do is reduce any idle time.”

Miss Part 1 on utilization benchmarking? Click here to read it.